he was john maynard keynes.the 1930s, his ideas spread from cambridge, england, to cambridge, massachusetts, to a generation of young economists waiting to spread the message. franklin roosevelt wasn't a young economist, but the leader of a nation with problems. in 1933, keynes was one among a babble of voices. his letter to the president would go unheeded. john maynard keynes had new ideas about the economy, and he rushed to get them before the public. dr. lorie tarshis, a student at cambridge in 1933, remembers the desperate rush to publish. why did keynes rush? i think the reason was the sense of urgency communicated to him by developments within britain and europe-- in germany where hitler had come to power, in the united states where revolution was in the air, and in other parts of europe and in britain, too, where the intellectual class was rapidly moving to the left. he felt he had an answer that was superior to marx as to analyzing capitalism's discomforts, an answer that was not only superior, but much

someone asked john maynard keynes if he could think of anything similar to this depression. es, it was called the dark ages." what was so different about keynes' view of the economy? to realize what a revolutionary idea keynes had, we have to recall again the classical view which said supply creates its own demand. if consumers don't want to consume all their incomes they can lend their savings to businesses who will invest it. the idea is that if consumption goes down, investment demand will go up. if investment demand goes down, consumption demand will go up. in either case total demand remains high. keynes said if you had a fall in investment spending, this might lead to a fall in consumption spending. total demand-- consumption demand plus investment demand-- might fall. it might be a multiplied fall once the process got started. let me stress this was a shocking idea. when demand falls, it may not repair itself a la says law. it may fall further. there may not be enough total demand to provide markets for the goods or the labor that produces them. the economics professio

the rationale was very much influenced by the ideas of john maynard keynes whose major work was published1936. keynes thought total private spending might be insufficient to sustain national income at the full employment level. the solution? increase government spending to fill the gap. we can illustrate this idea with a simple diagram. let's measure total spending by consumers, businessmen, and the government on this vertical axis, and national income, gnp along this horizontal axis. in 1946, full employment gnp when everybody who wanted jobs was able to find them, was probably around here at $300 billion in terms of 1946 dollars. this vertical line is equal to $300 billion. this line will tell us how much spending we'd need to sustain national income. keynes said private spending on consumers' goods, c and business investment, i might not be large enough to keep gnp at this level. he thought private spending would increase with income. the curve slopes up as gnp increases. it might end up here with this $50 billion gap between total private spending and full employment gnp. he said we c

out of the crash, john maynard keynes provides a new theory of the business cycle.was his revolutionary idea? boom and bust: who can explain the business cycle?

it's often soren to be jobs so the modern phenomenon of nonsense jobs in one thousand thirty john maynard keynes predicted that by centuries and technology would have advanced sufficiently that countries like britain or the united states would have achieved a fifteen hour working week and you notice that in fact we have essentially achieved that but we keep on filling it up with nonsense jobs so people are still working fifty sixty seventy hours a week in nonsense jobs whether it's dog walking or serving hamburgers or things that look like hamburgers at various fast food outlets around the u.s. so we keep on having these nonces jobs what is that about so he reckons it's partly like the soviet union where everybody was guaranteed a job in order to prevent any revolution or uprising and the same thing here is that they keep people in these nonsense jobs just to keep them occupied and feel like they're doing something otherwise you might have revolution but just like the soviet union you would find three four five six people serving you a hamburger and because they all needed a job we have the same

jobs so the modern phenomenon of nonsense jobs in one thousand thirty john maynard keynes predicted that by centuries and technology would have advanced sufficiently that countries like britain or the united states would have achieved a fifteen hour working week and you notice that in fact we have essentially achieved that but we keep on filling it up with nonsense jobs so people are still working fifty sixty seventy hours a week in nonsense jobs whether it's dog walking or serving hamburgers or things that look like hamburgers at various fast food outlets around the u.s. so we keep on having these nonces jobs what is that about so he reckons it's partly like the soviet union where everybody was guaranteed a job in order to prevent any revolution or uprising and the same thing here is that they keep people in these nonsense jobs just to keep them occupied and feel like they're doing something otherwise you might have revolutions but just like the soviet union you would find three four five six people serving you a hamburger and because they all needed a job we have the same thing here yo

no amount of losing our jobs on the nest eggs and the library for a copy of john maynard keynes the general theory of employment interest and money. this very pervasiveness of economics keeps us from getting distance on the subject. we can view death from as far from an average of 72.7 years if we are a male american and 79.5 years if we are female. and it is maturing as for funneling the brain. the work in the short term unless you are the president i guess. but there's no such thing as a dollar of gas. the money is always with us. [laughter] what am i going to do to take off shopping? drinking and drugs, i suppose i can play with the kids. they need new shoes. constant money has a bad effect on the human psychology. i would argue there is more unbalanced thinking of finance and about anything else. that may be the mainstay of the psychoanalysis, but knows how to string shrinks asked to be paid. people will do some odd things for publishers political or religious. if you consider how people spend their dough it hard the covers it. the reactions to cash even when it is half a world away and

this decisions, and that plus then bernanke, the only common sense in the world to think that john maynard keynes was right and that the europeans were wrong, but those are the two things that saved our economy. there is no economic dogma in washington controls everything. every50 million people day making aggregate decisions, and people making aggregate decisions often end up right, especially when making business decisions. bads easier to make decisions when you get really mad about something. it does happen in business, but it does not happen so often. bigger supply and less all at one end of manhattan, and they do stupid things. theyconvinced each other are right. they all talk to each other and forget about everybody else, but notusiness, they do necessarily talk to each other. they are making rational decisions every single day. that is what is going to happen in the health insurance market. you are going to make rational decisions every day. this does require good regulations. we will get to that in a second. but rational decisions are going to be made. if you have 50 million people every

john maynard keynes. .arry dexter white they both had a plan and shared a vision. the other parties in britain would could argue that they participated. but you will see the those to -- two lee these exercise to the formation of the exercise to the formation of the imf. like a credit union for the world -- it was right after the second world war, and there was massive reconstruction needed on the ground. the imf member countries pool resources that can provide a lifeline to member countries in need. the first country that use the resources provided by the credit union was my own country, france. it moved around the world. for those who believe the imf is ,nly for low income countries not at all. , ases around the globe economic crises go around the globe as well. it helped enormously the newly independent countries after decolonization. , thethe berlin wall fell funds supported efforts to transform from the centrally economicsonomy -- into market economics. in between, the imf has helped its members to overcome economic crisis in latin america in the 1980's, in asi

john maynard canse is usually voke -- keynes is often envoked. he never favored consumption, he favored investment. investment spending. his idea of stimsluss the kennedy-johnson permanent tax cuts or reagan tax cuts. le to the favor spending help, he didn't believe in deficit spending. there's no sound basis in economics for the policies we have followed. they have not ended the recession in almost five years, not surprisingly, and most forecasts i have seen call for subpar growth in the next five years. we can do better, should do better and if we're going to achee the america we want, we should do better. in searching through past recessions, there's only one recession similar to this one, 1938 to 1940, you can see table six and the paper in my testimony. what president roosevelt did is similar to what president obama has done he calls the businessmen economic royalists, tried to pack the supreme court, passed an exezz profits tax, ginned up the antitrust division to go after businessmen, got congress to acomponent the temp rare commission tha

one was john maynard keynes year there was an american harry dexter white they shared a vision the other participants would argue that they participated but if you look back at the archives you can tell that those to actually lead the exercises and contributed six to begin the intellectually to the formation of the imf. they had a vision of the global economy with countries with a clear objective the global economy with freddie adjustability. like a credit union right after the second world war there was much reconstruction needed on the ground. the imf member countries pooled resources that could have a lifeline to members said need the first country that use the resources that it participated was friends. my own country and moved around the world to know that it is only for low income countries eventually active in africa and not at all but it goes round the globe predominantly involved in europe that under the stage it helped either mislead the independent country after the colonization in when the berlin wall fell the funds that supported the eastern europe efforts from a centrally p